HUL, Nestle India eye majority stake in Havmor Ice Cream
Nestle India Ltd and Hindustan Unilever Ltd (HUL) have expressed interest in buying a controlling stake in Havmor Ice Cream Ltd, a Gujarat-based ice cream brand, two people aware of the development have said.
The separate discussions are in the initial stages and it would be premature to say whether a deal will be signed, said the first person. Besides the strategic investors, a couple of large private equity (PE) funds are also interested, he added. The company is valued at ₹1,000 crore.
Havmor is the seventh largest ice cream and frozen desserts maker in India with a 3.5% market share.
The value of the ice cream and frozen desserts segment in India grew 20% in 2016 to reach ₹10,200 crore in sales and is forecast to see a constant value CAGR (compound annual growth rate) of 11% over 2016-2021, leading to sales of ₹17,000 crore, as per a December 2016 report by market researcher Euromonitor International.
Gujarat Cooperative Milk Marketing Federation Ltd, which sells the Amul brand, is the leading firm in the ice cream and frozen desserts segment with a 17% market share. HUL is the second largest, with a 9.7% market share, as per the report.
“There is no serious discussion happening for stake dilution, though we can say there are interest in our company from PEs and strategic buyers,” said Ankit Chona, MD of Havmor.
An HUL spokesperson declined to comment. A Nestlé India spokesperson said, “We do not comment on speculation.”
HUL has a strong presence in the Indian ice cream space through its brands Wall’s, Magnum and Cornetto. Nestle India’s presence is in the premium ice cream space with its Mövenpick brand. Among brands, HUL’s Wall’s holds a 3.9% market share, while Cornetto and Havmor hold 3.5% each.
Havmor has more than 40,000 outlets across Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Punjab, Goa, Delhi, Chhattisgarh, Uttar Pradesh, Karnataka, Haryana, and Telangana, according to the company.
Other major firms in India’s ice cream and frozen desserts market are Mother Dairy Fruit and Vegetable Pvt. Ltd (7.8% market share), Vadilal Industries Ltd (5.3%), among others.